A loan classified as Non-Performing Asset must adhere to criteria set by the Reserve Bank of India; effective alternative remedies must be pursued before invoking writ jurisdiction.

ORDER :

LALITHA KANNEGANTI, J.

IN WP.NO.25242/2022

This writ petition is filed seeking the following prayer:

"PRAYER

WHEREFORE, the Petitioner most respectfully prays that this Hon'ble Court be please to:-

a) Issue a Writ of Certiorari or any other writ quashing the impugned Sale confirmation Letter vide Annexure-"A" dated 02.12.2022 and

b) To direct the respondent not confirm the sale in favour of third party.

c) To direct the respondent not to execute the sale certificate in favour of third party/ auction purchaser.

d) Grant such other reliefs as this Hon'ble Court deems fit, in the circumstances of the case, in the interest of justice and equity."

2. It is the case of the petitioner that on 03.12.2016, Mortgage Loan was sanctioned i.e., a sum of Rs.1,00,87,000/-. The said loan facilities were secured by creation of Equitable Mortgage of the Schedule Property in favour of the respondent/Bank. According to the petitioner, the outstanding amount payable to the respondent/Bank as on the date of filing of the writ petition is an amount of Rs.95,76,999/-. It is stated that as per the Reserve Bank of India Master Circular - Prudential Norms on Income Recognition Asset Classification and Provision pertaining to Advances, in terms of Clause: 2.1.2 Non-Performing Asset (NPA) is a loan or an advance where interest and/or installment of principal amount remains over due for a period of 90 days in respect of term loans. It is the case that the account of the petitioner was never in 'out of order' situation in order to declare them as Non Performing Asset. It is stated that on 14.07.2022, the respondent/Bank had brought the secured asset under E Auction. Since there was no bidder, auction sale was dropped. It is stated that the auction was conducted on 28.07.2022 and the respondent/Bank is going to confirm the sale and sale certificate is likely to be issued on 02.12.2022. The petitioner will be deprived of his right to property and as the petitioner is not having any other efficacious remedy, he has come before this Court.

3. When this writ petition came up on 15.12.2022, a Co- ordinate Bench of this Court had passed an interim order of stay of the impugned sale confirmation letter dated 02.12.2022, subject to the petitioner depositing 25% of the amount in due, within two weeks from 15.12.2022. It is the case of the respondent/Bank that the petitioner has deposited the money within the time but 25% of the amount comes to Rs.27 lakhs and odd but he had deposited Rs.21 lakhs and odd. It is submitted that there is non-compliance of the interim order passed by this Court. Thereafter, they have issued fresh sale notification.

4. Learned counsel appearing for the petitioner submits that as per the order dated 15.12.2022, he had paid the 25% of the amount due. In spite of that, the respondent/Bank went ahead with the auction.

5. Learned counsel appearing for the respondent/bank has placed the sale certificate and the outstanding amount before this Court. As per the sale notice, the outstanding due is an amount of Rs.1,08,79,326/- and 25% of the amount will come to Rs.27 lakhs and odd. It is submitted that as such, the order of this Court is not complied with and as it is a conditional order, they went ahead with the further proceedings.

6. In response to that, learned counsel for the petitioner submits that in the first sale notice, the price is quoted as Rs.2,20,00,000/- and now it is quoted as Rs.1,91,00,000/-.

7. Having heard the learned counsels on either side, perused the entire material on record. In this writ petition, the petitioner